Country Business Analysis Of Iraq

Introduction to Iraqi Business Analysis

Iraq has a rich and diverse resource base--the second biggest proven reserves of oil, at 112.5bn barrels (BBC News, 2004), abundant water, and a national labor force of more than 7 million people--much larger than any member country of the Gulf Cooperation Council (CIA: The World Fact Book, 2007). War is a very good business, mainly after the war is over. But the war in Iraq is still going on. It takes the lion-hearted and realistic person to do business in the midst of an unending sectarian violence that juxtaposes a civil war and in a completely different culture. It will be lot of fun too! Success factor is learning from the Iraqi war project.

Historical and Political Background of Iraq.

Iraq is a Middle Eastern country, bordering the Persian Gulf, between Iran and Kuwait. It has a land mass of totaling 437,072 square kilometer, slightly more than twice the size of Idaho. It was formerly part of the Ottoman Empire, occupied by Britain during the course of 1920's World War I. An advanced civilization existed by 4000 B.C. After 2000 B.C. the land became the center of the ancient Babylonian and Assyrian empires. Iraq attained its independence as a kingdom in 1932 and declared a republic 1958. Ironically, it had been ruled by series of military juntas until 2003 when the U.S-lead coalition forces ousted the last dictator--Saddam Hussein. Iraq now has a fragile democracy established by the U.S-led coalition forces. Some of the world's greatest ancient civilizations developed here.

It has a population of 27,499,638, with more than 40 percent of the population under 15 years (CIA: The World Fact Book). Official language of Iraq is Arabic, secondary language is Kurdish, which is official in Kurdish regions, Assyrian, Armenian. According to CIA: The World Fact Book, as at 2006, Iraqi literacy rate was 74.1%; the population of age 15 and over can read and write.

Economic profile.

Iraq has a rich and diverse resource base--the second biggest proven reserves of oil, at 112.5bn barrels, abundant water, and a national labor force of more than 7.4 million people--much larger than any member country of the Gulf Cooperation Council (GCC).

The Iraqi currency is the new Iraqi dinar (NID). It has Gross Domestic Product--purchasing power parity $87.9 billion as at 2006. GDP - per capita (PPP) is $2,900. It is a monocultural economy where 95 % of foreign exchange earnings come form oil. Besides petroleum, other natural resources are natural gas, phosphates, sulfur. Iraq's major business center are Baghdad, the capital city, with 6,777,300 (metro. area), 5,772,000 (city proper); Mosul, with 1,791,600; Basra, 1,377,000; Irbil, 864,900 and Kirkuk, 755,700. Iraq is 1.9 ranked nation number 161 in the "Corruption Index" (Globalcommunity.com, 2007).

Country Business Culture and Customs

Like many Arab countries, Iraq embraces and honors the achievements of its past and maintains its strong tribal culture. Culture includes norms based on learned attitudes, values and belief (Daniels, Radebaugh and Sullivian, 2006). Culture is a shared, learned, symbolic system of values, beliefs and attitudes that shapes and influences perception and behavior--an abstract "mental blueprint" or "mental code." Culture is the way people do, say and see things--from their own beliefs, values and attitude eye-glasses. Understanding Iraqi culture is a sine-qua-non for any business success.

As a general rule, business hours in Iraq are 8.00 am to 4.00 pm. Government organizations work from 8:00 am to 1:00 pm or 2:00 pm. Some private businesses and businessmen are available to work at any hour from Sunday to Thursday. Friday is an Islamic holy day and therefore part of the weekend. Offices tend to be closed on Fridays. During the month of Ramadan, hours are reduced. Even though it is not always necessary, it is considered polite to make business appointments in advance. When arranging business meetings it is important to take into account the impact of official and unofficial holidays on all business activities. Punctuality is viewed as positive attribute in Iraq. It is a formal business practice to arrive at business meetings on time as lack of punctuality impacts the negotiations negatively.

Structure and hierarchy in Iraqi companies. Companies in Iraq are hierarchical in structure. There is a strong sense of authority and a large power distance, which creates a distinct separation between those in senior business roles and their subordinates. As a direct consequence of company hierarchy, decisions are always made at the top of the organization, either by one person, who has the ultimate authority, or a small council.

Business and working relationships in Iraq. Establishing good working relationships with your Iraqi business colleagues helps to create an environment of mutual respect and trust and is a crucial part of Iraqi business culture as well as win-win situation. Respect over-rides most other societal rules and is imperative for successful business relationships. It is customary to show respect for elder business associates by greeting them first.

When greeting your Iraqi business colleagues, it is customary to shake hands on both arrival and departure. Offer a firm but gentle handshake, always with the right hand. One should not attempt to shake hands with a female associate unless she initiates the gesture. Status and respect for others is a fundamental element of Iraqi culture, therefore it is necessary to address your Iraqi counterpart by the appropriate title, for example "Doctor", followed by their last name, or for example "Abo Ahmad", which means "Father of Ahmad". However, first names are only used between close friends and family, therefore you should wait to be invited before you address someone in this way.

Initial meeting. It is common practice for senior-level business associates to exchange business cards at initial meetings. Ensure you have one side of your card translated into Arabic or Kurdish and include your company position and title, since rank and social standing are vital in Iraqi business culture. When exchanging cards, present your card so that the translated side faces the recipient. Business meetings are the most significant part of doing business in Iraq. The initial appointment is generally considered to be an informal, yet polite, introductory meeting, where associates take